Clearlake leads $125m investment in GoAmerica

Clearlake Capital Partners teamed with Cerberus Capital Management and Churchill Financial to finance two add-on acquisitions for GoAmerica.

Clearlake Capital Partners has led a $125 million (€85 million) round of financing for GoAmerica, a provider of communications services for the deal and hard-of-hearing. Clearlake committed $40 million in equity and $30 million in second-lien debt to the deal. Churchill Financial and Ableco Finance, an affiliate of Cerberus Capital Management, provided $55 million of first-lien senior debt, including an unfunded revolver facility.

GoAmerica operates call centers which the hearing impaired can access via video relay in order to receive American Sign Language translations of phone calls to outside parties. The company used the investment to execute a three-way merger with Verizon’s Tele-Relay Services Division and Hands On Video Relay Services. The resulting company will pursue “key initiatives”, GoAmerica said, particularly product innovation.

“The market is an interesting one, and it's doing very well,” said Clearlake co-founder Behdad Eghbali.

He cited GTCR's 2005 acquisition of video-relay services provider Sorenson Communications, which he said has earned one of the best returns of its vintage. GoAmerica is now the number two player in the market behind Sorenson. Hands On is the exclusive service provider for both AT&T and Sprint; the combination with Verizon's Tele-Relay division and GoAmerica gives the resulting company access to most customers in the market, Eghbali said.

Clearlake was founded last year by Eghbali, Steve Chang and Jose Feliciano in partnership with hybrid hedge fund Reservoir Capital Group, which is also an investor. Chang and Feliciano were both partners at Santa Monica-based special situations fund Tennenbaum Capital Partners before founding Clearlake, while Eghbali was previously a managing partner at Voyager Venture Partners in Boston. He also worked in the buyout business of TPG.

Clearlake's pursues a hybrid private equity and distressed debt strategy, which Eghbali said allows the firm to retain the flexibility of a hedge fund while taking a private equity approach to investing.

Clearlake recently bought a 9 percent stake in e-commerce business Buy.com for an undisclosed amount, and participated in the $59 million acquisition of security products producer CompuDyne, in partnership with The Gores Group